CAIRO: The International Monetary Fund (IMF) has urged Sudan to float its currency to boost growth and investment, a measure the government has opposed even after the United States lifted 20 years of sanctions in October.
The government would need to accompany a market-determined exchange rate with other tough reforms such as expanding the country’s tax base if Khartoum hopes to benefit from sanctions relief, the IMF said in a report published on Monday.
The Sudanese pound has weakened against the dollar since Washington lifted sanctions encouraging traders to step up imports, putting pressure on scarce hard currency.
It hit an all-time low of 27 pounds against the dollar on the black market in November but strengthened to 23 pounds per dollar after a raft of emergency measures that included capping currency transfers and cracking down on currency traders.
The IMF said the end of sanctions was an opportunity for Sudan to strengthen its economic outlook but it required a currency float.
“Fiscal policy should be tightened to eliminate the monetization of deficits, thus helping to reduce inflation and buttress macroeconomic stability,” it said. It projected GDP growth of 3.25 percent for 2017, down from 3.5 percent in 2016.
The weakened pound has contributed to surging inflation, which reached 33.08 percent year-on-year in October, according to the Central Statistics Office.
The central bank has held the official exchange rate at 6.7 pounds to the dollar but currency is largely unavailable at that price.
“The tax base should be broadened, energy and wheat subsidies phased out and replaced by increased cash transfers to the poor, and capital investment increased,” the IMF said.
The import-dependent country has suffered both from the sanctions and from the secession of South Sudan in 2011, when it lost three-quarters of its oil output, its main source of foreign currency.
One of its largest other sectors is agriculture.
Sudan sorely needs a financial lifeline from donors but it is unable to borrow from the IMF after failing to pay back previous loans and efforts to reschedule debts it owes other countries have faltered.
Sudan’s external debt, which the IMF described as unsustainable, is expected to reach $54.1 billion in 2017 and $56.5 billion in 2018, the report said.
IMF says Sudan must float currency to boost growth, investment
IMF says Sudan must float currency to boost growth, investment
OPEC+ approves gradual output increase from April amid market uncertainty
RIYADH: Eight OPEC+ producers agreed to raise oil output gradually from April, citing healthy market fundamentals and a stable global economic outlook, after ministers met virtually to assess market conditions and determine future supply policy.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman approved a production increase of 206,000 barrels per day for April, according to a statement.
The increase marks the start of a gradual unwinding of 1.65 million barrels per day in voluntary reductions introduced in April 2023 to shore up prices.
The move comes as the US-Israeli conflict with OPEC+ member Iran and Tehran’s retaliation have disrupted shipments in the Middle East. Oil, gas and other cargoes moving through the Strait of Hormuz have faced interruptions since Feb. 28 after shipowners received warnings from Iran that the area was closed to navigation, Reuters reported.
In a statement released after the talks, the eight nations cited a “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” as the rationale for the measured production increase.
The statement stressed that the full 1.65 million bpd “may be returned in part or in full subject to evolving market conditions and in a gradual manner.”
They also stressed they retain flexibility to increase, pause or reverse the supply hike if needed. That includes the option of reinstating cuts announced in November 2023, when several members pledged additional voluntary reductions totaling 2.2 million barrels per day.
The producers reiterated their commitment to the broader Declaration of Cooperation and said compliance with output targets, including voluntary adjustments, will continue to be monitored by the Joint Ministerial Monitoring Committee.
The group also reaffirmed plans to compensate for any overproduction recorded since January 2024, saying the phased increase would allow participating countries to accelerate those efforts.
Brent crude futures jumped on Feb. 27 to $73 per barrel, the highest level since July, amid fears of a wider Middle East conflict and potential supply disruptions through Hormuz, which accounts for more than 20 percent of global oil transit, Reuters reported.
Oil prices are expected to rise, with Barclays lifting its Brent crude forecast to around $100 a barrel from $80 a day earlier, while analysts said prices could jump by as much as $20 per barrel when trading resumes on March 2 if tensions escalate further.
The eight countries will continue holding monthly reviews of market conditions, conformity and compensation levels, with the next meeting scheduled for April 5.
